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Opening the sky is the only way to save airlines in Southern Africa-CEO of a new trade association

  • Aaron Munetsi, new CEO of the Southern African Aviation Association, shares his views on the challenges and opportunities facing the regional aviation industry.
  • He explains that due to the narrow margins, there is little room for price elasticity in the market.
  • In addition, he hopes that existing means of opening Africa’s skies will be used to support the creation of a sustainable post-pandemic aviation industry on the continent.

The aviation sector faces the most devastating crisis since World War II. The most likely route for the regional aviation industry in southern Africa to survive is to open the sky.

This is due to Aaron Munetsi, the new CEO of the Southern African Aviation Association (AASA). Munetsi will take over Renel Stander, the former CEO of Comair. He has become CEO of Wesgro, a tourism, trade and investment institution in Western Cape and Cape Town.

Members of AASA’s airlines make up about 90% of all airlines based in the Southern African Development Community (SADC). Its associate members include airport operators, air navigation, commercial airliner and engine manufacturers, banks and fuel companies.

Munetsi believes that the greatest aviation opportunity in Southern Africa is the connectivity of aviation services within the region. He said that this is essential for SADC’s overall economic recovery and future growth, a commercially sustainable air transport industry that can connect and carry people and products between and beyond regional markets. State to have. AASA advocates close coordination and cooperation between government and industry, regardless of the owners of the entities involved.

However, many airlines in the SADC region shut down during the pandemic. Some are temporary and some are permanent. Many jobs directly and indirectly related to aviation have been lost.

One way to create a sustainable industry on the continent is to open the sky, Munetsi says.

“The framework for liberalizing Africa’s skies has evolved from the 1988 Yamoussoukro Declaration to the 2018 Single African Air Transport Market (SAATM), which currently has 35 signatories. It’s a great time to get started, “Munezi says.

“It is imperative to activate the African Continent Free Trade Agreement, which supports and promotes the free movement of people, goods and services throughout the African Continent. This will create additional trade and create employment, stability and security. It unleashes the benefits of a wide range of GDP that is promoted and unimpeded. Air connectivity within Africa will be brought to countries and their communities. “

Munetsi, who has been with SAA for over 20 years in various managerial positions and is based in eight countries in his career, said the opportunity to lead AASA at this critical time was “not to be missed.” increase.

According to Munetsi, the key challenge is that while demand is slowly returning, price elasticity is low in the aviation market in southern Africa. In short, airlines must walk a tightrope to increase market share, cover costs and lower profit margins.

Meanwhile, regaining passenger confidence in air travel remains a priority amid prolonged concerns about Covid-19 infection.

Munetsi said AASA will play an increasingly important role in raising concerns and proposing solutions through interaction with all key stakeholders, including air transport policy makers and regulators. I’m predicting.

“Current financial sustainability challenges are the toughest peacetime challenges faced by AASA members. AASA, the African Aviation Association (AFRAA) and the International Air Transport Association (IATA) have provided financial relief and financial relief throughout the industry. We continue to encourage the government to provide support, “he says.

“We appreciate the competing demands on public wallets, but with the exception of cash injections into airlines, the government has reduced, postponed, numerous taxes, surcharges and statutory costs on air travel and air cargo. Relief can be provided by disposal or exemption. “

Willy Walsh, Secretary of IATA, Recently used Airports Company SA (ACSA) as an example “To get back the money airlines couldn’t spend with them during the Covid-19 crisis” at some airports that want to raise their fares. ACSA has proposed a 38% increase in pricing in 2022 to offset the losses incurred as a result of the Covid-19 impact. ACSA states that this claim is unfounded.

Another way to support the aviation industry is to ratify the 2000 Cape Town Convention, Munesi said. The treaty enshrines ownership of leased aircraft and other movables. Eliminating the risk of aircraft being seized by a third party gives airlines access to much lower leasing, financing, and insurance premiums. The treaty has been widely adopted and implemented in most countries, but South Africa, for example, has not yet ratified the treaty 20 years later.

Opening the sky is the only way to save airlines in Southern Africa-CEO of a new trade association

Source link Opening the sky is the only way to save airlines in Southern Africa-CEO of a new trade association

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